The legal battle between FTX and Sam Bankman-Fried (SBF) has been ongoing, leaving FTX customers worldwide uncertain about the future of the exchange. In the midst of this, FTX’s subsidiary, Liquid Group, a Japanese crypto trading platform, had to halt withdrawals on Nov. 15, 2022. This was due to Changpeng Zhao, the CEO of Binance, announcing the liquidation of its substantial holdings of FTX Token (FTT), which caused a domino effect and led to the slowdown in fund withdrawals by FTX and its subsidiaries.
FTX Japan users have had to endure the frustration of not being able to access their funds for months. However, on Feb. 21, 2023, FTX Japan resumed withdrawals, which involved moving the funds from the defunct exchange to a Liquid Japan account. This news came as a relief to many investors, and it was soon followed by reports that a popular crypto trader from Japan, Hibiki Trader, had successfully withdrawn all of their funds.
The withdrawal of funds by FTX Japan users is not surprising, considering the uncertainty surrounding the legal battle between FTX and SBF. FTX is a well-known cryptocurrency exchange, and any negative news can impact user trust and confidence. Additionally, the slowdown in fund withdrawals caused by Binance’s liquidation of FTT holdings had a ripple effect on FTX and its subsidiaries, resulting in delayed access to funds for many customers.
It is important to note that the legal battle between FTX and SBF is not related to the slowdown in fund withdrawals or Binance’s liquidation of FTT holdings. The litigation is a separate issue that has been ongoing for some time, and its resolution is still unclear. FTX customers worldwide are eagerly awaiting a conclusion to the legal battle, which will hopefully bring some clarity and stability to the exchange.
In conclusion, the withdrawal of funds by FTX Japan users is a reflection of the impact of negative news and uncertainty in the cryptocurrency market. The legal battle between FTX and SBF and Binance’s liquidation of FTT holdings have added to the existing market volatility and has resulted in delayed access to funds for many FTX customers. It remains to be seen how the legal battle will be resolved and what the future holds for FTX and its customers.
In a Twitter update on Friday, Luna Foundation Guard (LFG), an organization that supports the Terra ecosystem, revealed that its efforts toward compensating Terra holders remain futile due to the ongoing litigation.
Terraform Labs, its founder Do Kwon, and several VC firms that make up the Luna Foundation Guard (LFG) are facing a long list of lawsuits for violation of federal securities laws and misleading investors.
On Friday, Luna Foundation stated that it would be unable to conduct the distributions of funds to Terra owners as long as the legal matters are outstanding.
“Our goal is to distribute LFG’s remaining assets to those impacted by the depeg, smallest holders first. Unfortunately, due to ongoing and threatened litigation, distribution is not possible at this time. While these matters are outstanding, there can be no timeline established for resolution,” LFG tweeted.
Friday’s statement comes after reports emerged that South Korean authorities had frozen almost $40 million worth of crypto funds tied to LFG.
According to reports from Luna foundation, its fund reserves currently hold a total of around $100 million – that is a drop in the bucket of the estimated $60 billion in value wiped out by the collapse of the Terra ecosystem. The organization explained that it had used part of its reserve funds to help defend UST’s peg and broader Terra economy after the stablecoin crashed in May 2022.
This tweet comes as the first update on the situation since May’s announcement to compensate users. The latest report shows that Luna Foundation is still intending to use all its remaining funds to compensate users of UST stablecoin, but has yet to do so, citing litigation woes.
The tweet met wild reactions from crypto community members. Crypto researcher FatManTerra slammed Luna Foundation’s defense on why it can’t repay affected TerraUSD (UST) investors. While FatManTerra claimed the Foundation was only making excuses, another Twitter user SonicTheBer said this is just another level of exit scam.
According to court reports from Friday, yet another suspected player behind the OneCoin ponzi scheme is now set to face justice.
On Friday, counsel for marketing guru Karl Sebastian Greenwood and US prosecutors informed Manhattan Judge Edgardo Ramos that the two sides are currently discussing a plea deal for Greenwood, who was indicted in 2018 for charges relating to his involvement in the OneCoin Ponzi scheme.
Greenwood — who is currently facing five charges including money laundering, fraud, and conspiracy — was described in previous civil litigation as the “public face of OneCoin.” Greenwood was responsible for pitching OneCoin and soliciting new investments in the project, which eventually defrauded billions from investors worldwide.
The indictment alleges that Greenwood “made false statements and misrepresentations soliciting individuals throughout the world […] resulting in the receipt of over $1 billion of investor funds”. The marketer operated out of Sweden during his time with OneCoin, and was arrested in Thailand in 2018.
Greenwood is in jail in Manhattan as he awaits his trial or a possible deal. The mastermind behind OneCoin, Ruja “Cryptoqueen” Ignatova, remains at large.
The OneCoin case and its aftermath has proven to be one of the messiest in crypto’s history, and a movie based on the events is set to enter production with star Kate Winslett, along with a separate BBC series in the works.
Additionally, despite the ongoing litigation Greenwood should consider himself lucky: Ignatova’s personal lawyer Mark S. Scott was disbarred in November following his conviction for money laundering, and two other marketers involved with promoting OneCoin were found dead after a reported kidnapping in July.